Nifty stocks trading at historical low valuations?

Even after having a commendable potential for wealth accumulation, the stock market is dependent on sound judgment and opportune decisions. It is quite inevitable that if you are looking to enter the market, there would be many questions running in your mind.

The uncertainty of Sensex, the fluctuation in Nifty share price and non-availability of  suitable stock options can create initial challenges. However with right expert advice and industry research, you can get hold of various aspects of trading and investment.

While there is no fixed formula of success in the stock market, it is imperative to have a knowledge of Nifty; its regular performance and daily predictions. You can access the online data for free tips and recommendations, using standard tools like Nifty premium calculator.

There is also a market trend wherein the investors wait for low valuations of Nifty so that they can commit fresh capital. However in the past few years Nifty has shown a tremendous consistency and has given best returns to the investors.

Although, minor hiccups in the market like lack of fund flows, rising crude oil prices, and high valuations keep affecting the Nifty Stock Trading, chances of it going low are negligible. During this year’s budget, market volatility was the lowest as compared to the past ten budgets, which indicated that companies offered a solid foundation to strengthen the Nifty trading further.

However, the NSE’s Nifty 50 Index lost around Rs 3.6 lakh crore in market value this year because of investors’ negative sentiments around Rs 13,000 crore bank scam.

Starting in November 1999, Nifty was trading at 1364 points and now it is  almost nine time more. In first week of May, the Nifty 50 retrieved its crucial resistance level of 10,700 to close near its intraday high. A barometer of Indian economy, Nifty 50 comprises of 50 large cap stock known as blue chip stocks.

While reports and analysis like nifty predictions for tomorrow does not provide any certainty towards progress or decline in the trend; one thing is certain that in past 15 years, Nifty gave 511% absolute return and 12.83% of annualized return to the investors.

While there might be some sector specific setbacks, the Nifty’s valuation touched a record high at the end of last quarter in 2017. For the first time, the gauge’s one-year forward price-to-earnings multiple hit two standard deviations in January 2018.

Though, 2018 has been full of volatility stock experts have expectations that Nifty will go up substantially in the next 12-18 months. As FY19 will complete the full implementation of GST, the market support is going to boost the improvement in investment growth rates.

While the investment scenario is positive as the markets are at an all-time high but still you need to consider all the factors related to risks and benefits of stock market. Though, the markets are dominated by liquid assets, the maximum put value for options is placed at 10500 followed by 10600 strikes which seems like a fair value for Nifty by the year end.

Needless to say that investor sentiments are positive towards the market and ignoring some uncertain hiccups, Nifty valuations will be in better position to offer better returns this year.

Leave a Reply